Good news for songwriters: The Copyright Royalty Board in the United States released a written decision this week confirming the five-year mechanical royalty rate increase between 2018 and 2022.
To recap: Last summer, the Copyright Royalty Board (CRB) upheld its decision to increase the overall fee paid to songwriters in the United States from on-demand streaming services between the years 2018 and 2022 ( i.e. Phonorecords III).
The move came four years after songwriters won a major victory when the CRB ruled that songwriter/publisher royalty rates for streaming and other mechanical uses must increase significantly in the United States. United.
The move centered on an increase in the overall percentage of US streaming service revenue that must legally be paid by Spotify to songwriters.
The CRB has decided to increase this percentage from 10.5% For 15.1% over the five years between 2018 and 2022. This was the largest rate increase in the history of the CRB.
However, Spotify and other music streaming companies – including Amazon and Google/Alphabet (but not Apple) – later launched a legal challenge against the new tariffs, arguing they were unjustified.
In July last year, the CRB made its final decision – and decided that the rate of 15.1% Remained.
After initial remand proceedings, the court finally upheld the result of Phonorecords III, according to its Initial determination released this week.
The determination is currently restricted, however, MBW understands that it does not change any prior rulings on remand, but rather codifies the rates that were expected from prior rulings, and primarily the original July 2022 ruling.
These prices can be seen below:
According to the CRB, “upon the issuance of a final decision, and in the absence of changes arising from any request for a re-hearing that may be filed by a party, these tariffs and conditions will be applicable to the prior period from January 1 2018. until December 31, 2022”.
He adds that “the original decision is currently under review to determine which parts, if any, contain confidential information that must be redacted before being made public”.
Reacting to the results of the initial dismissal decision, NMPA President and CEO David Israelite said, “We are delighted that the court has finally upheld the outcome of Phono 3, a case that was decided in 2018.”
“Now songwriters have some certainty about their rates, and we’ll make sure they get the hundreds of millions of dollars that digital streaming companies owe them during this period of adjustment.”
David Israelite, NMPA
He added: “This initial dismissal decision confirms the 15.1% overall rate increase that we fought for, but the time we have waited for this decision proves that the Copyright Royalty Board system is woefully flawed. .
“Now songwriters have some certainty about their rates, and we’ll make sure they get the hundreds of millions of dollars that digital streaming companies owe them during this period of adjustment.”
Bart Herbison, Executive Director of the Nashville Songwriters Association International (NSAI) added: “The testimonies of the three witness songwriters in this trial were powerful, compelling and illustrated the difficulty songwriters have in making a living in the age of streaming – as well as the importance and value of composition in the commercial musical process.
Herbison added: “Steve Bogard, Liz Rose and Lee Miller, all NSAI Board members, were moving and informative and played a huge part in the historic increase.
“The process is long and difficult and requires time and preparation. We are grateful to these songwriters and to the NMPA.
Separately, last summer also brought triumphant news for songwriters and publishers in the US after the NMPA, NSAI and US digital music services trade organization DiMA agreed to a settlement for higher mechanical streaming royalty rates in the United States prior to the Copyright Royalty Board proceeding known as ‘Phonorecords IV’.
In December, the Copyright Royalty Board (CRB) formally agreed to a (nearly) music industry-wide settlement that improved streaming royalty rates for songwriters in the United States effective January 1, 2023. .
The settlement – known as ‘Phonorecords IV’ or ‘CRB IV’ – will see songwriters and music publishers paid an aggregate rate of 15.35% of a given interactive streaming service’s US revenue. by 2027, phased over a period of five years.
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